Financial services sector leaders want the National Disability Insurance Scheme (NDIS) to be renamed because they fear it may confuse consumers.

Financial Services Council CEO John Brogden says having “insurance” in the title will lead people to believe they are covered by a policy.

“The life industry can integrate with the Government’s proposal but the one downfall is the word ‘insurance’,” he told the recent AIA group insurance summit in Sydney.

“Members of the scheme will think they are covered by an insurance policy and what is proposed is not insurance.”

NDIS Advisory Group Chairman Bruce Bonyhady says he told the Government it should not use the word.

“A large number of people we have spoken to think they will be covered by NDIS, but they never will be,” he said. “It would be bad policy if a lot of people didn’t insure themselves for income protection.”

Mr Bonyhady says a whole generation may believe the Government has covered them for disability suffered through injury.

“NDIS is about a group of people who have significant needs that are way beyond the cover provided by total and permanent disability insurance,” he said.

“The average NDIS package will be about $35,000 a year for people included in the scheme, with some getting more and some less.”

Mr Bonyhady says NDIS could be used to promote insurance, because the scheme will not cover everybody with a disability.

“We can use NDIS to show how we are underinsured,” he said. “It can be used as a stepping stone to talk more broadly about insurance and is an opportunity to explain the importance of income protection cover.”